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babu bharathi   08 March 2021

Non C T S Cheque

if the cheque was returned as Non CTS instrument ,then it comes punishable under section 138 of N I Act or not?

 3 Replies

G.L.N. Prasad (Retired employee.)     09 March 2021

The reason mentioned by the drawee bank  for returning the cheque holds good and those CTS cheques can be presented by the banker across the counter by the collecting banker.  A cheque is always a cheque legally, and the modes of payments are laid down rules for presentation may be different.  If the cheque is returned with the reason "Refer to drawer" or "Inadequate funds" are the reasons to reckoned for the failure of drawer in failing in his commitment.

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     09 March 2021



Section 138 can be invoked only when the cheque return memo states that there are insufficient funds in the accountholder's account.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     09 March 2021

Non-CTS compliant cheques shall not be processed for clearing with effect from January 1, 2019, so not comes under N.I. section 138

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